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At its Investors Day on Wednesday, Macy's revealed that key to its new "Polaris" turnaround strategy is a refurbishment of its private label brands, especially in women's apparel.

"The biggest change that we're making is just the DNA," Macy's Chief Merchandising Officer​ Patti Ongman told the audience. "I think we've gotten a little stagnant in ready to wear."

The retailer sees opportunity in appealing to millennial customers, who have largely shunned its stores and its private labels in favor of rivals. Ongman noted that millennials account for half the ready-to-wear market outside of Macy's, where "under 40" apparel shoppers account for just 35%.

Analysts also note the room Macy's has to grow, with Cowen & Co. analyst Oliver Chen in emailed comments saying that "top opportunities for success will come from ready-to-wear categories."

Enter Macy's new goal for its private brands — especially for itsINC International Concepts, Alfani, Style & Coand Charter Club women's apparel — which is to leverage them for 25% of sales by 2025. Those four brands are being overhauled and are "well on their way" to each becoming a $1 billion brand, Ongman said.

To that end, the department store has retooled its organizational structure in this area, developed "distinctive, on trend capsule collections" and is introducing new brands, she said. Another goal is "improved margins through better sourcing and materials management."

The effort recalls a similar project at Target, which a few years ago ditched several of its private apparel brands in favor of developing new ones in men's, women's and children's, among others, each with a new brand ethos and category focus, like denim, career, comfort or active. That has helped the mass merchant grab market share in apparel (exactly Macy's goal), according to the company itself, as well as firms including GlobalData Retail. Target CEO Brian Cornell in November gave much credit to the new labels for a 10% rise in apparel sales in the third quarter and called the advancement in apparel ​a highlight "of the quarter if not the year."​

"The Target brands have a real point of view — there is very little cannibalization among the brands. They were well thought out," Jane Hali, CEO of investment research firm Jane Hali & Associates, told Retail Dive in an email.​ "The important factor for Macy's is, what type of business are they targeting with each brand? Each brand that Target developed had a new name and were targeted for a different business, men's, intimate apparel, swimsuits and in ladies [ready to wear]."

Macy's does have something to work with, particularly in INC, which Hali says is likely a "billion dollar brand already." But the others have faltered, she warned. "Each brand other than INC has looked the same. It's hard to tell the difference. I think they made price the differentiating factor."

That makes sticking with those labels somewhat risky, according to Ray Wimer, a professor of retail practice at Syracuse University's Whitman School. "If the consumer sees it as a tired brand, if it's not exciting anymore, there is a risk to say, 'We're going to grow these brands,'" he told Retail Dive in an interview. "I'm kind of wondering if they're doubling down on these brands, what their plans are for them."

Macy's focus on cost cutting — it was a major theme of the day and shows up in every element of its plan, from its supply chain, its closure of 125 stores and main offices, and its 2,000 layoffs — likely impedes taking Target's approach of ripping up the private label playbook.

"Target was able to spend the time doing it — I don't know if Macy's has the time," Wimer said. "They're restructuring for cost savings. So I can see from a business perspective what they're doing. The risk is the consumer doesn't respond to it."